Health insurance options: Choices in North Carolina

Maryalene LaPonsie |
November 9, 2010

One of the keystones of health reform is providing additional medical coverage options for those with pre-existing conditions. Conservatives might grimace at the thought of "Obamacare," but you don't have to be a bleeding heart to agree that something should be done to ensure critically ill individuals receive the care they need. In 2014, insurers will no longer be able to deny medical coverage based on pre-existing conditions. However, until that time, federally mandated high-risk pools provide a temporary health insurance option.

One state, two plans

Most states will either run their own high-risk pool or allow the federal government to administer a similar insurance program for their residents. According to an article in the Lincoln Tribune, North Carolina is giving its residents a choice: either participate in a state-run plan or sign up for the recently-rolled-out federal high-risk pool.

Which one is the better deal? Well, that depends.

If you are one of the unfortunate ones who have been denied affordable health insurance because of a pre-existing condition, the federal plan might be the better option. The premiums for the federal plan are reported to be one third less than those of the state pool. In addition, the benefits are better, and you might be eligible for a subsidy that will make the plan even more affordable.

That's all peachy until you get to one minor detail: paying the bill. Seems that the high-risk pool administered by the federal government has been short on funding. The feds allocated over $5 billion nationwide for the high-risk policies, with North Carolina getting $145 million. Meanwhile, the Centers for Medicare and Medicaid Services estimate that based on initial enrollment numbers, that money pool will run dry in 2013.

And who is paying the $5 billion for the pools? Why you, the taxpayers, of course!

Self-sustaining health insurance

Fortunately, there is a way to provide health insurance to those with pre-existing conditions without breaking the bank. North Carolina used an infusion of cash from their Health and Wellness Tobacco Trust Fund to set up their state high-risk pool in early 2009. In the 18 months since then, more than 4,000 individuals have signed up for the state plan and their premium payments--averaging $561 a month--sustain the solvency of the program.

It is believed that some 100,000 North Carolinians are uninsured. The state run high-risk pool is managed by the office of Insurance Commissioner Wayne Goodwin, who estimates that the program can reasonably sustain up to 8,000 enrollees.

Meanwhile, the federal high-risk pool has enrolled only about 150 people so far in spite of the better benefits and lower costs. One factor may be the concern that the program is unsustainable. Another factor may be that to be eligible for the federal high-risk pool, individuals must be uninsured for a period of at least 6 months.

Are two plans better than one?

It would seem more logical for the state and federal governments to combine forces rather than offer competing plans. After all, both are administered by the same umbrella company and both have the same goal of providing health insurance options to those with pre-existing conditions. But then, that type of cooperation might simply be too logical for the government.